Shares in Yahoo jumped more than 3pc to $16.48 in after-hours trading in New York after Mr Yang said that he would be leaving the company to pursue other interests.

The departure of Mr Yang, who co-founded Yahoo with David Filo in Silicon Valley in 1995, comes less than a month after the company named former PayPal executive Scott Thompson as its chief executive.

Yahoo had been without a leader since ousting Carol Bartz last summer.

“My time at Yahoo, from its founding to the present, has encompassed some of the most exciting and rewarding experiences of my life,” Mr Yang said yesterday.

Although he only served as chief executive between June 2007 and early 2009, Mr Yang owns just over 3.5pc of the company’s shares and is believed to wield considerable influence at the firm. Until his resignation, Mr Yang also held the title of “Chief Yahoo”.

Yahoo has faced intense pressure from shareholders to find a strategy that revives the fortunes of a company that once dominated the internet.

Although the company’s homepage remains one of the most visited pages on the internet, Yahoo has failed to develop a compelling social network or keep pace with the increasing number of people who access the internet on mobile devices.

The company dispatched Ms Bartz and announced a strategic review last summer but has since been criticised by investors for the way it has conducted the review.

Mr Yang’s decision to leave removes someone who was keen to keep the company independent. Alongside his role as a co-founder, he is likely to be best remembered for his decision to reject an almost $50bn takeover offer from Microsoft in early 2008.

Microsoft has voiced an interest in helping a consortium of private equity companies buy a stake in Yahoo.

Although there will remain pressure on chairman Roy Bostock to follow Mr Yang out of the company, investors will now be focused on what Mr Thompson does with the strategic review now that he is in charge.